Tech heavyweights are racing to release more accurate mapping and location services for use in smartphones, cars, tablets, cameras, and more. But it was Nokia
A new direction
In 2007, Nokia acquired Navteq, the world's largest digital mapping company. Today, the $8.1 billion purchase is starting to pay off. Nokia's location and commerce unit currently accounts for about 4% of revenue, though that figure is growing at a rapid pace. Earlier this year, Microsoft
The phone maker also has ongoing partnerships with Amazon, Groupon
Cook went on to suggest that owners use one of the third-party apps, such as Microsoft's Bing, AOL's MapQuest, Google Maps, or Nokia mapping applications, while Apple works on improving its own option. Still, if Nokia wants to truly capitalize on Apple's misstep, it should release a version of its navigation product for iOS 6.
Mapping Nokia's future
The Wall Street Journal reports, "Opus Research has estimated that mobile ads associated with maps or locations accounted for about 25% of the roughly $2.5 billion spent on ads in mobile devices in 2012." This figure should continue to grow over the next few years as mapping technology and location-based programs become more advanced.
Additionally, advanced location services create unique commerce opportunities for local businesses. For example, Groupon inked a deal with Nokia in August to integrate its Groupon Now service with Nokia's Maps application on the Windows mobile marketplace. This way, when users search using Nokia's Maps app, the letter "G" will pop up on the map, denoting nearby Groupon deals.
However, of all these partnerships, the Oracle deal is especially important because it expands Nokia's reach beyond the individual consumer to business customers. If Nokia plays its cards right, the company's location and commerce division may one day be a key revenue driver, as more organizations license Nokia's mapping technology. Essential to this is the success of the Nokia Location Platform.
That's because the Location Platform business offers a set of application programming interfaces, which let corporations build out mapping services specific to their organization's needs. This allows a company such as Oracle to seamlessly combine Nokia's mapping capabilities into its own Oracle-based software. Perhaps more important is the fact that Nokia wholly owns, builds, and distributes its mapping content.
This could explain why many leading automakers rely on Nokia for location data, as well. Major car brands, including BMW, Mercedes, and Volkswagen, have chosen to integrate Nokia's navigation technology into their vehicles. Looking ahead, Nokia should continue to benefit from its market-leading position in mapping and location services.
Nokia is the clear winner. Unlike Apple Maps or Google Maps, Nokia location-based applications can work without a data connection. Not to mention, Nokia's option currently provides turn-by-turn directions in more than 110 countries, and coverage in roughly 200 countries. For comparison, Apple's turn-by-turn navigation works in 56 countries and Google Maps reaches just 39 countries.
If the Finnish phone maker can lock down more licensing deals, it could lift the company out of its recent mobile funk. It's no secret that Nokia currently has Apple beat when it comes to mapping experience. However, Nokia doesn't hold a flame to Apple's mobile dominance, and I don't see that changing anytime soon. Find out how you should play Apple in the Fool's new premium research report. The report's detailed analysis covers every angle of the Apple investment thesis, and also includes timely notifications on the stock. Click here to get your copy now, while it's still available.
Fool contributor Tamara Rutter owns shares of Apple and Amazon. Follow her on Twitter, where she uses the handle @TamaraRutter, for more Foolish insights and investing advice. The Motley Fool owns shares of Microsoft, Oracle, and Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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